Goal agreements are a common leadership tool in organizations. The goal-setting theory forms the theoretical basis for this. It tries to answer the question which characteristics of human performance goals under which conditions have the strongest performance effects. The theory has been successfully applied in the field of professional work but is also used in other contexts (e.g., school, sports). After the basic assumptions and findings for individual work and group work are presented, we show newer developments, e.g., research on unconscious goals. The validity of critical voices that warn of unwanted side effects such as health risks or unethical actions when leading with goals is also discussed. Although improper application of the theory in practice indeed can bring problems, such accusations are, in our opinion, not appropriate. We also discuss what is known about the relationship between leading with goals and the health of employees and present studies in which goal setting is used to promote recovery at work. Our overview shows that the theory is well-anchored empirically and very useful in practice. However, the development of the theory can by no means be considered as “completed.” Goal setting theory is rather to be seen as a “major construction site of leadership research” that will continue to grow thanks to very stable foundations also in the increasingly digitized world of work.